When investors want to purchase and renovate real estate, their financing options can be somewhat limited. Traditional mortgage funders may be put off by properties that require extensive remodeling or structural repairs and business plans that depend on rezoning.

That reluctance has created a growing national market for private money lenders and a lucrative opportunity for investors in private loan investment funds. My company entered the private lending business after spending two decades doing exactly what we now lend others the money to do: renovate residential and commercial properties in Washington, D.C., Virginia, Maryland and Delaware. Investors in our private loan fund benefit from our experience developing more than 1,400 residential and 200,000 square feet of commercial projects. We entered the lending market because we saw a gap in funding that traditional lenders weren’t filling.

It's wise for us to wonder: How big is the potential private-loan fund market and how much of that market share can private loan funds capture?

To figure out how big the opportunity is, we can look the issue through two lenses: How many properties are renovated and resold or what proportion of all homes sold are flips.

Let’s first look at how many real estate fix-and-flips happen each year. Data source ATTOM produces a U.S. Home Flipping report based on real estate records filed in counties where more than 80% of Americans live.

ATTOM’s 2016 Year-End U.S. Home Flipping Report estimates that Americans flipped 193,009 single family homes and condos. Any house sold by a willing seller to an unrelated willing buyer twice in a single 12-month period counts as a flip in the ATTOM data.

Compensating for the remaining 20% of the market not covered by the ATTOM data, we know renovators flipped nearly 300,000 properties in 2016. With the median flip priced at $189,000, that’s a $56 billion market.

As a double-check of that estimate, you can look at the share of the total $5.4 billion U.S. housing market that’s controlled by flippers, 5.7%, according to the ATTOM report. Using that same $189,000 median price, we get a total market of $58 billion.

So either way you run the data, it’s clear the volume of property flips in America is substantial. Examining how much of that volume private lenders currently finance tells us there’s capacity for more lending, creating an opportunity for investors in private loan funds.